The epidermal growth factor (EGF) receptor is a substrate for phosphorylation by the calcium- and phospholipid-dependent protein kinase (protein kinase C) at Thr654. The hypothesis that this phosphorylation is causally related to the regulation of the functional properties of the EGF receptor was tested by substitution of Thr654 with an alanine residue. Activation of protein kinase C using phorbol ester caused a decrease in the high affinity binding of EGF to Chinese hamster ovary cells expressing wild-type [Thr654]EGF receptors. Similar results were obtained with cells expressing mutated [Ala654]EGF receptors. The regulation of the protein kinase activity of the EGF receptor by protein kinase C was examined using a synthetic peptide substrate for tyrosine phosphorylation. Protein kinase C caused a Ca2+-dependent decrease in the tyrosine-protein kinase activity of the wild-type [Thr654]EGF receptor. In contrast, no inhibition of the tyrosine-protein kinase activity of the mutated [Ala654]EGF receptor caused by protein kinase C was detected. In further experiments, the desensitization of EGF action caused by the activation of protein kinase C was examined by investigating the regulation of the transferrin receptor by EGF. Phorbol ester was observed to cause the desensitization of signaling by the wild-type [Thr654] and mutated [Ala654]EGF receptors. These data are consistent with a role for the phosphorylation of EGF receptor Thr654 in the regulation of the receptor tyrosine-protein kinase activity. However, the inhibition of the high affinity binding of EGF to cell-surface receptors caused by protein kinase C does not require Thr654. It is concluded that independent mechanisms account for the regulation by protein kinase C of the EGF receptor affinity and tyrosine-protein kinase activity.